MSE News: NatWest and RBS ditching introductory bonus rates – but it could...



  • A key advantage of introductory bonus rates is that they create a reason for the consumer to act.

    To move from 0.5% with bank A to 1.5% for a year with bank B is worthwhile. To move from 0.5% with A to 0.6% with B may not be worth the effort.

    Remove the incentive to act and you not only lose introductory bonus rates but you will further suppress the underlying rate.

    The consumer will lose twice.
  • When you don't need cash, they throw them at you.
    When you apply for a loan, they smell blood and charge you loan shark rates.

    I keep a few thousand pounds on 0% Balance Transfer deals on the go, not because I need the money now, but in case I need it suddenly. I don't bother with the 3% Transfer Fees, but grab the ones with 2% Fees or less when they crop up. The money sit in easy access accounts earning 1.5% before tax, so effectively I'm paying about 1% for the priviledge of having some spare cash. Six years ago, I could have got 5%+ interest before tax, so the difference was just free money.

    The monthly repayments should help with the credit score, although the phrase "minimum payment flag" sounds ominous.

    If you follow the notion of "Neither a borrower nor a lender be" and suddenly become short of cash, and the lack of a credit history means extortionate rates, contemplate this. If you had been carrying over £1,000 worth of BT for the last 10 years, paying £10 a year to do so, you would now:

    1. Have £1,000 emergency cash to draw on.

    2. Have lenders willing to lend you money at a reasonable rate because you have a long established credit history.

    I therefore submit, 0% Balance Transfer deals are a godsend for people on low income, if they manage it correctly.
  • minislimminislim Forumite
    355 Posts
    Part of the Furniture 100 Posts Combo Breaker
    why does anyone still bank with them?

    they offer rubbish interest rates.
    the customer service is rubbish.
    their IT systems aint up to much.
  • Archi_BaldArchi_Bald Forumite
    9.7K Posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    seeing we all own a fair amount in them, I suppose we should be grateful they still have customers.
  • N1AKN1AK Forumite
    2.9K Posts
    Part of the Furniture 1,000 Posts
    Pincher wrote: »
    I therefore submit, 0% Balance Transfer deals are a godsend for people on low income, if they manage it correctly.

    Paying off a CC by direct debit also gives you a credit history without costing anything, and you can't get cashback cards with 0% introductory rates so that isn't a strong case.

    Generally, the people on low incomes are the least likely to be taking advantage of 0% CC rates in the manner you suggest (banking the money elsewhere for a nominal charge). Those at the very bottom of the pile won't be considered for the cards with attractive opening offers either.

    The theory behind getting rid of introductory rates is that IF the banks do so while maintaining the same level of profitability all the normal rates will improve instead. I'm not entirely persuaded that this is what will happen, but when you consider how much banks will are giving to people exploiting offers (stoozing etc) which isn't going to other customers I can see why there is a desire to 'fix' it.
    Having a signature removed for mentioning the removal of a previous signature. Blackwhite bellyfeel double plus good...
  • It's the same old story. You scrimp and save so you have £1,000 in the bank. Then the alcoholic partner steals your ATM card and withdraws everything to buy drugs. There is no hope of getting the money back, so you stab him in the heart for betraying you: and they arrest you and put you in prison for getting rid of a parasite for the good of society.
  • bigadajbigadaj Forumite
    11.5K Posts
    Ninth Anniversary 10,000 Posts Name Dropper
    Going back to the original non story, it's no doubt considered a brilliant pr move, we'll confirm we're banning something we don't do because we're not very good at it. It's a bit like accrington stanley saying they're boycotting the champions league.
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